World Bank cuts China, east Asia growth forecast
08 Oct 2012
The World Bank cut its economic growth forecasts for the east Asia and Pacific region today saying there was a risk the slowdown in China could worsen and last longer than many analysts had forecast.
"Unlike the rest of the region, China is experiencing a double whammy – the growth slowdown is driven by weaker exports as well as domestic demand, in particular investment growth," World Bank chief economist for the region, Bert Hofman, said at a briefing in Singapore.
He stressed, though, that the World Bank, like many economists, still expected China to have a soft landing as seen from the bank's revised 7.7 per cent growth forecast for this year and 8.1 per cent for next year.
The bank also released its latest East Asia and Pacific Data Monitor, warning that the slowdown in China could accelerate.
The international lender said in the report that ambitious investment plans announced by several local governments in China could be hit with funds crunch, due largely to the fact that governments were feeling the pinch of a cooling real estate market, which lowered land sales revenues.
According to the World Bank, the central government was not likely to come up with a major fiscal stimulus package as policymakers had concerns about a rebound in home prices as also a possible reversal of hot money flows.
